Store Cards Versus Credit Cards
November 24, 2008
Consumers that decide to go down the road of store cards rather than credit cards this Christmas could be landing themselves with interest of around £ 1.9 million, which could equate to £ 1.4 million more than what they would spend if they took a credit card according to uSwitch.com.
The average spend per person at this time of year is £ 604.00 but with the interest that is charged by these types of cards it could be raised by £ 312.00 to mean that the amount paid back is more like £ 1000.00.
It is thought that around 16 million people will pay 47% interest more on store cards than they would with a credit card which, as uSwitch.com advised, is an average of 8% more than what the rate of interest is on a credit card.
Another method of getting money at this time of year is through withdrawing cash from credit cards and it is thought that this will be the funding for around 1.7 million people. The only problem that this has that it will incur an interest rate of, on average, 29.97% which in turn again takes the amount you have taken out up considerably.
The overall recommendation that uSwitch.com advises is that the consumer should take a credit card over a store card but to also compare credit cards so that you get the best deal to suit aswell as be paying back more than what the minimum payment is back.
uSwitch.com, Personal Finance Expert Louise Bond says “There are tough times ahead in 2009 as consumers begin to feel the full impact of recession.”
“In light of this, Christmas 2008 will undoubtedly be on a tight budget. uSwitch.com urges shoppers to ensure that whilst being mindful of the amount they spend, the way in which they spend it deserves equal discipline.”
“The worst thing to do is rack up debt on ‘easy’ credit which carries an extortionate APR. There are a number of competitive 0 per cent credit card offers in the market and consumers need to shop around for the best deals.”
“People must be able to repay the debt accrued over the Christmas period in the most economical way possible.”
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